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SingaporeEconomicsQuick questions
Macroeconomic Policies
Quick questions on Policy mix and evaluation explained: H2 Economics
4short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What are the small-open-economy lens?Show answer
For a small open economy like Singapore, the constraints are decisive: fiscal policy has a small multiplier (high import leakage), independent interest-rate policy is constrained by mobile capital, so the exchange rate is the main tool for managing inflation and demand, while supply-side policy drives long-run growth. The typical mix is therefore the exchange rate plus targeted fiscal measures plus heavy supply-side investment.
What is q1?Show answer
Explain why governments use a mix of demand-side and supply-side policy. [3 marks]
What is q2?Show answer
State the first step in evaluating which policy to use. [2 marks]
What is q3?Show answer
Explain why the exchange rate is central to a small open economy's policy mix. [2 marks]
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